Bitcoin is down to the bottom of its ascending channel on the 4-hour time frame but it looks like bulls are returning to defend support. A long spike and green candle formed on a test of the bottom, indicating that investors are buying on dips and might be keen on sustaining the climb.
The 100 SMA is above the longer-term 200 SMA to suggest that the path of least resistance is to the upside or that the uptrend is more likely to resume than to reverse. However, the moving averages might simply be oscillating to reflect range-bound action for now.
Still, a bounce off support could take Bitcoin to the very top at the $7,000 major psychological level or at least until the mid-channel area of interest at $6,700. The moving averages might hold as dynamic resistance at $6,600 as well.
Stochastic is indicating the presence of bullish pressure as it moves north, so Bitcoin price might follow suit. The oscillator has a lot of ground to cover before hitting overbought levels, so buyers could stay in the game for a bit longer. Some bullish divergence can also be seen as price made lower lows while the oscillator had higher lows.
RSI is also turning higher after dipping into the oversold region, indicating that buyers are regaining control while sellers take a break. A move below the $6,300 area, however, could reveal that sellers are still strong and could spur a reversal from the climb.
Some say that the bounce was merely a result of profit-taking rather than an actual catalyst as there appears to have been none so far. Bitcoin is celebrating its 10-year anniversary but more folks are highlighting its downbeat year-on-year performance so far.
Even JPMorgan CEO Jaime Dimon had negative things to say about Bitcoin, but this didn’t make much of a dent on price as he has previously expressed these sentiments.
Images courtesy of TradingView